Federal Financial Regulators Assure Congress They Seek Minorities and Women in Workforce

September 9, 2020 by Tom Ramstack

WASHINGTON — Representatives from federal financial agencies defended their record on hiring women and minorities Tuesday while members of a congressional subcommittee accused them of an uninspired effort.

“I’m not sensing that we’re making a lot of progress here,” said Rep. Sylvia Garcia, a Texas Democrat.

The congressional hearing coincides with bills introduced recently that would require agencies overseeing financial institutions to act more aggressively to ensure an ethnically and gender diverse workforce.

Regulatory agency officials who testified before the House Financial Services subcommittee on diversity and inclusion said they are already making much of the progress some members of Congress seek.

Agency witnesses came from the Federal Reserve, the U.S. Treasury Department, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

“We have been moved by the calls for social justice and greater economic equality and commit to doing our part to contribute to the greater good,” Joyce Cofield, the OCC’s director of the Office of Minority and Women Inclusion, said in her testimony.

The OCC supervises about 1,200 banks and federal savings associations nationwide.

The agency’s primary program to promote diversity is the Office of Minority and Women Inclusion, which was established in 2010 under the Dodd-Frank Act. Congress passed the Act after the Great Recession that began in 2008 to tighten credit limits on banks and to make their business practices more transparent.

“To help ensure that the OCC can hire and retain diverse management and staff, [the agency] develops detailed analyses on a variety of workforce trends, including recruitment and hiring, promotions and separations and employee development and retention strategies,” Cofield said.

In the past 10 years, the number of minority staff members among the roughly 3,500 person workforce has increased from 30% to 36%, she said.

The percentage of minority managers in the OCC has risen from 21% to 28% while female managers increased from 37% to 39%, Cofield said.

Democrats on the subcommittee said diversity in the agencies depends too heavily on voluntary efforts and cannot be monitored by Congress.

“There are some people who would say it is not enough,” said U.S. Rep. Al Green, a Texas Democrat.

The Dodd-Frank Act, which includes provisions to encourage diversity in financial institutions, has failed to reach its goals, Green said.

“If this could be done voluntarily, it would have been done,” he said.

Green sponsored a leading reform proposal called the Promoting Diversity and Inclusion in Banking Act of 2020. It would require federal banking regulators to include a diversity and inclusion component in their Uniform Financial Institutions Rating System.

A second bill pending in Congress, called the Federal Reserve Racial and Economic Equity Act, would amend the Federal Reserve Act to require financial institutions to report additional demographic information about their staff and clients.

Monica Davy, director of the Office of Women and Minority Inclusion at the National Credit Union Administration, tried to assure the congressional subcommittee her agency already was acting aggressively to recruit minorities.

“The NCUA has expanded its recruitment efforts at historically black colleges and universities, Hispanic-serving institutions and other minority-serving institutions,” Davy said in her testimony.

The subcommittee chairwoman and ranking member said diversity represents good business planning rather than a feel-good measure to include women and minorities.

“The success of our economy depends on the full inclusion of all communities,” said Joyce Beatty, an Ohio Democrat.

Rep. Ann Wagner, a Missouri Republican, added, “Companies with diverse workforces perform better.”

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